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Elanor’s new 7.10% corporate bond

06 October 2017

Elanor Investors Group (ASX code: ENN), has announced it has finalised the issue of $40 million worth of unsecured notes. Elanor’s note issue makes the Australian property investor and funds management company the latest addition to a growing list of local companies without credit ratings which have raised funds by issuing high yield bonds in Australia.

The company intends to use a proportion of the proceeds to invest in two new projects. One is the seeding of its $80.6 million Elanor Metro and Prime Regional Hotel Fund which will comprise a portfolio of three hotels. The other is its $60.35 million Bluewater Square Syndicate fund.

Although bond yields have risen by nearly 1% over the last year, interest rates are still a lot closer to historically-low levels. As such, the search for a higher rate of interest has taken some investors into higher-risk assets such as those issued by unrated issuers. The notes have a 7.10% coupon and they will mature on 17 October 2022.